Thursday, June 05, 2014

meaningless numbers aren't advertising

Pacific Pillows lets consumers buy bedding products that are
used in various hotels including several hotels owned by MGM. Its website
allows people to “shop by hotel,” and (at least some) pillows are named after
hotels that MGM owns.MGM also sells
pillows and bedding using MGM’s marks for its hotels.MGM sued Pacific Pillows for trademark
infringement, counterfeiting, false advertising, and unfair competition.Pacific Pillows counterclaimed, to no avail.

The Sherman and Clayton Act claims were dismissed because
there is no antitrust law left.MGM’s
allegedly false advertising on its pillow tags was also not actionable under
the Lanham Act.Pacific Pillows lacked a
“concrete and particularized” injury,
because all it alleged was that MGM’s advertising created “significant
confusion in the marketplace” and harmed Pacific Pillows, which was too vague
and speculative.Even with standing, the
claim failed. The allegedly false advertising was an incorrect registry number
on pillow tags, but a registry number isn’t a commercial advertisement.“The incorrect registry number is simply a
series of letters and numbers that means nothing to consumers. The number does
not give typical consumers any information about the pillow, and it certainly does
not influence customers to buy the pillow.”Even if other parts of the tags (the logo) were advertising, that didn’t
make the registry number a commercial ad.Also, Pacific Pillows failed to plead that the registry number was
likely to influence purchase decisions or cause injury to Pacific Pillows.

Separately, Pacific Pillows alleged that MGM falsely advertised
a pillow named “Aria,” because “Aria” wasn’t the exclusive pillow used at the
Aria hotel, and that a pillow similar to the “Aria” pillow is only used in a
small number of rooms. Pacific Pillow also lacked standing to bring this
claim.Further, it didn’t allege a false
statement of fact: it didn’t allege that MGM advertised that a customer who
purchased “Aria” would get the same pillow that is found in every room at the
Aria hotel. Since both sides agreed that a similar pillow is found in some
rooms in the Aria hotel, there was no falsity.

Common-law unfair competition failed too, as did wrongful
interference with contractual relations/prospective economic advantage.Though MGM allegedly contacted Pacific
Pillows suppliers, and thus did intentionally interfere with contractual relationships,
Pacific Pillows didn’t successfully plead that this interference was improper.MGM notified the suppliers that they were
supplying a company that was allegedly infringing MGM’s marks.Protection of its trademarks was legitimate.

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